Bank of America Sees Silver Surging to $309 in Extreme Scenario as Supply Deficit Deepens

Bank of America has dropped a bombshell forecast for silver, projecting the metal could skyrocket to between $135 and $309 per ounce by the end of 2026. The staggering range, driven by historical gold-to-silver ratios and a persistent supply deficit, signals a potential rally that could redefine the precious metals market.

The bank’s metals team, led by Michael Widmer, head of metals research, bases these targets on the gold-to-silver ratio, currently at 59:1. This ratio reflects how many ounces of silver are needed to buy one ounce of gold, and a lower number indicates silver is undervalued relative to gold.

Using a gold price of $4,320 per ounce, BofA calculates that a compression to the 2011 ratio low of 32:1 would push silver to $135, while a drop to the 1980 extreme of 14:1—seen during the Hunt Brothers squeeze—yields the eye-popping $309 figure.

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Widmer cautions that $309 is not a guaranteed outcome but a plausible cap under specific conditions. Even if that peak remains out of reach, he argues silver could significantly outperform gold in 2026, given its proven capacity for violent price swings. Just this year, silver touched a high of $121.67 on January 29 before cratering 36% to $75, only to rebound to $81.50.

Physical market dynamics add fuel to the forecast. Silver is on track for a sixth consecutive annual deficit in 2026, with a projected shortfall of 67 million ounces, following a 40.3 million-ounce deficit in 2025. Mine supply struggles to keep pace due to declining ore grades, operational challenges, and a sparse pipeline of new projects that can take up to 15 years to develop.

Industrial demand, while mixed, remains a critical driver. Although solar photovoltaic demand is expected to fall 19% in 2026 due to thrifting and substitution, sectors like data centers, AI infrastructure, and automotive are poised to offset some of the decline. Investment demand, meanwhile, continues to hold strong through ETFs and physical buying.

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The risk of a physical squeeze looms large. In 2025, London silver inventories dropped sharply, pushing spot prices above futures and lease rates to 39%, a clear sign of scarcity. If industrial buyers, investors, and traders converge on limited supply, BofA warns that prices could spike beyond what fundamentals alone suggest.

Wall Street’s consensus, however, remains far more conservative, with most forecasts clustering between $79 and $90 per ounce, and only a few outliers nearing $150. BofA’s upper target of $309 stands as a stress-case scenario, not a base expectation, but it underscores silver’s unique position at the intersection of industrial and monetary demand. For the metal to approach either target, gold must maintain its strength, supply must stay constrained, and investor interest must intensify.

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